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Strategies & Market Trends : Trade What You See, Not What You Think -- Ignore unavailable to you. Want to Upgrade?

To: aldrums who wrote (500)	4/14/2001 1:03:12 PM
From: Threei	Respond to of 867

Thanks ald, great article by LBR! A trader anticipating a trend day should change strategies, from trading off support/resistance and looking at overbought/oversold indicators to using a breakout methodology and being flexible enough to buy strength or sell weakness. A trader caught off guard will often experience his largest losses on a trend day as he tries to sell strength or buy weakness prematurely. That's what we worded as INERTIA vs PENDULUM. We can tell when the market is approaching the end of contraction or congestion because the average daily range narrows. We know a potential breakout is at hand. However, it is difficult to predict the direction of the breakout because buyers and sellers appear to be in perfect balance. All we can do is prepare for increased volatility or range expansion! Most breakout trading strategies let the market tip its hand as to which way it wants to go before entering. This technique sacrifices initial trade location in exchange for greater confidence that the market will continue to move in the direction of trade entry. Exactly the strategy we use when define the range and play breakout in the direction of break, sacrificing best price for higher odds sake. It's great to get a confirmation from such a prominent industry leader as Linda Raschke :) Vadym

To: aldrums who wrote (500)	4/15/2001 9:22:50 PM
From: Apakhabar	Respond to of 867

Thanks Alex. That's an interesting piece. What I meant for myself was much narrower, however, and it has nothing to do with the sort of TA that LBR is using, or any TA at all. It's rather the idea that elite traders in the course of their trades develop their intuition to a point beyond the one that tells them when to take a position. It develops to the point where it tells them to break a rule (about size) and take a bigger position. What I am hoping to develop is not a sense of when to pounce on an opportunity suggested by one or more technical indicators or charts, but rather, a sense of when to modify my money-management rules. I think altering one's money-management rules is much more dangerous (and potentially profitable) and thus should not be attempted unless one's intuition is highly developed. That's what I'm striving toward.